NZD: New Zealand Dollar rate shifted to strengthening in the middle of the week

At the Forex currency market, the New Zealand Dollar rate has shifted to strengthening on Wednesday after two days of large- scale sales under pressure from external background.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD, and is moving along the signal line, not giving a clear signal. Stochastic Oscillator continues to decline in the overbought zone, giving a sell signal.

Forex recommendations: in case of breakdown at the level of 0.8240, the pair will begin to correct toward 0.8260 and 0.8290.

 On Thursday, 14 July market expects the release of GDP in New Zealand, which has been postponed earlier.

Earlier, the Reserve Bank of New Zealand decided to keep interest rate unchanged at the minimum of 2.50% per annum, since it is going to continue its work on improvement in economic system. According to the head of the RBNZ, NZD has been overvalued because of high export prices for raw materials, therefore, national currency rate, which has increased over the last two months, has adverse impact on the rebalancing of the economy in New Zealand. Bollard expressed confidence that decline of the NZD will be gradual because currency intervention will not be able to change the trend.

It became known earlier that business sentiment NZIER in New Zealand rose to 27 points in Q2 against -27 points earlier. In general, it is a positive factor.

The data released earlier showed that net level of budget deficit in New Zealand rose to -NZD$40 billion (20.4% billion of the country’s GDP) in May, which was below economists’ forecast. According to the estimates of the Finance Minister Mr. English, budget deficit is still too large and active measures are required to reduce it.

Trade balance in New Zealand was at the level of NZD$605 billion in May against the forecast of NZD$1000 billion. This is a negative data, because decline in the trade balance will indicate decline in the level of exports later, which will be the impact of cooling in Chinese economy.

 

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